‘The Billionaire Raj’ Review: Gatsby on the Ganges

India’s new super-rich are sometimes dubbed “Bollygarchs.” Few are corrupt in the Russian way, but their wealth is tied to government favors. Tunku Varadarajan reviews “The Billionaire Raj” by James Crabtree.

Businessman Vijay Mallya.
Photo:
Getty Images

By

Tunku Varadarajan

July 4, 2018 12:50 pm ET

There have been scores of books about India that focus on its poverty, some sensitive and soulful, others frankly execrable. In contrast, very few offer a portrait of Indians with wealth. This expository lopsidedness is particularly grating in the present time, when India’s economy has galloped to seventh place in the global rankings, breathing down the creaky necks of France and Britain (precariously perched at sixth and fifth, respectively).

Writers like Katherine Boo have told us who the slum dwellers of India are, how they live and love in a largely pitiless country. But who are the people who’ve made all the money, the ones who’ve profited mightily from India’s rise in the years since 1991, when the economy was first unshackled from socialism? Why haven’t Indian billionaires been studied and written up as avidly as have the Russian oligarchs?

One obvious reason is that there are very few outright criminals among the Indian super-rich, very few that are unapologetically corrupt in the Russian way. Still, as
James Crabtree
notes in “The Billionaire Raj,” India’s new hyper-rich are sometimes dubbed the Bollygarchs, “for their ability to bring together much the same mixture of industrial might and intimacy with power” as their Russian counterparts.

A former Mumbai bureau chief for the Financial Times, Mr. Crabtree has written a book that is a lively and valuable blend of the empirical and the anecdotal. In the mid-1990s, he tells us, India had only two—repeat, two—billionaires, with a paltry $3 billion between them. By 2010, Forbes included 49 on its global list. Today there are over 100, more than any country bar the U.S., China and Russia. The wealth of India’s billionaires currently comprises 15% of the country’s GDP, up from 1% in 1995.

Photo:
WSJ

The Billionaire Raj

By James Crabtree Tim Duggan, 408 pages, $28

There are, Mr. Crabtree makes clear, two broad classes of billionaire in India. Crudely put, the first is that of the Good Billionaires—such as those from the software sector—whose milieu is largely “untouched by government” and whose business success is “assumed to come mostly from efficiency and innovation.” They feature in Mr. Crabtree’s book only in passing.

Instead, he devotes his energies to a study of the Bad Billionaires, those who work in “rent-thick” sectors where firms couldn’t possibly make money without access to government favors. The “raj” in the title is intended to suggest a “nexus”—a word beloved of Indian editorialists—between business and government, akin to the one that bound government to commerce during the state-controlled “license raj” that prevailed before 1991. Mr. Crabtree describes in detail the manner in which the billionaires of this cohort got rich with the help of politicians and bureaucrats.

You can, if you’re so inclined, become depressed by this nexus-narrative. To paraphrase a former head of India’s central bank—whom Mr. Crabtree interviewed at length—politicians need billionaires to give them money to fund their election campaigns and offer sops to the poor in order to win their votes; and the billionaires need the politicians to offer them public resources and contracts at cut-price. It’s a venal embrace, but also one of shared ardor.

This arrangement has led to massive infusions of money into Indian elections. “Before liberalization,” Mr. Crabtree notes wryly, “Indian democracy was a cheap, low-tech affair.” Today India is “not far behind the United States as the world’s most expensive democracy, except that in India’s case most of the money [is] unaccounted for”—since campaign-finance laws are easily circumvented. Expenditure by politicians in the last general election in India, in 2014, amounted to $5 billion. Mr. Crabtree laments that “India’s problems of corruption and cronyism would be impossible to fix without first lancing the boil of . . . illicit cash in politics.”

The best parts of Mr. Crabtree’s book, however, aren’t his observations on the civic state of India (although these are certainly valuable and wise). They are his reportage, in which he relates his encounters with several of the men who are emblematic of the billionaire raj. These include Vijay Mallya, currently in financial exile in London, where he lives beyond the reach of the Indian taxman and his many creditors. Mr. Mallya, known as “the Branson of Bangalore” in his heyday, is a liquor baron and the owner of a Formula One team. “A man of coteries and Gatsby-style parties and famously ill-disciplined timekeeping,” he fled to London when a private airline he founded went belly-up.

Other Indian billionaires aren’t as fiscally ill-disciplined, but they can be as vulgar as Mr. Mallya, if not more so. We are given an exhaustive account of the life of Mukesh Ambani, India’s richest man, whose 27-floor skyscraper home in Mumbai—occupied by his family alone—is “designed to keep India at bay.” It cost $1 billion to build and has a monthly energy bill of $109,000. Mr. Ambani deals in petrochemicals, textiles and telecom. Mr. Crabtree doesn’t get to interview him, but he does talk to several others from among India’s super-wealthy, including
Gautam Adani,
a Gujarati billionaire who is reputed to have profited handsomely from his proximity to India’s prime minister.

Mr. Crabtree makes the argument that the “rampant cronyism and wild growth” one sees in India today is reminiscent of the Gilded Age in the United States. The Ambanis and Adanis and Mallyas, he suggests, are not unlike the Rockefellers and Vanderbilts of yesteryear. Having made that comparison, he asks whether India—like the U.S.—will have a Progressive Era after its own Gilded Age, in which the methods of wealth creation are cleaned up and made more moral. There is, he believes, no reason India can’t do what South Korea and Singapore have done—or what America did before. But this won’t happen, he writes, unless India addresses the mind-boggling inequality that persists in the country. The Billionaire Raj, he says, needs to be a passing phase, not a permanent condition.

Mr. Varadarajan is a fellow at Stanford University’s Hoover Institution.

Tunku Varadarajan reviews “The Billionaire Raj” by James Crabtree

India’s new super-rich are sometimes dubbed “Bollygarchs.” Few are corrupt in the Russian way, but their wealth is tied to government favors. Tunku Varadarajan reviews “The Billionaire Raj” by James Crabtree.